The proposed research program addresses the question of how a variety of chronic stressors, such as peer problems, parental discord, and parental job stress, affect child mental health. Stressors to which a child is directly exposed and stressors that may indirectly impact a child through their influence on parental behavior are examined. Two patterns of parent-child interaction are considered as a pathway through which these daily stressors influence child adjustment. Two working models are proposed. The Daily Fluctuations in Behavior Model describes two immediate effects that daily stress may have on parent-child interaction: (1) lowered emotional and behavioral involvement, and (2) increased aversiveness. The Long-Term Mental Health Outcome Model describes long-term repercussions that may result from the daily repetition of these interaction sequences. Two research studies are proposed. A longitudinal design is included to evaluate the Long-Term Model using structural equation modelling. Interview and questionnaire data will be collected from school-aged children, parents, and teachers each year for three years. Two main hypotheses will be tested: (1) chronic stress results in a parent-child relationship that is progressively characterized by less involvement and more aversive interactions, and (2) these changes in the parent-child relationship mediate a prospective association between stress and child maladjustment in the form of behavioral problems, low self-esteem, and depression. The daily report study, an initial intensive study in which a subsample of children and parents will be monitored over the course of five consecutive days, will investigate the short-tern processes described by the Daily Fluctuations Model. It will test the hypothesis that decreased parent-child involvement and increased aversive interactions are two immediate outcomes associated with a parent's and/or a child's exposure to stress earlier in the day. Data from the two studies will be combined to test whether there is a stronger prospective relation between chronic stress and both a deteriorating parent-child relationship and child maladjustment among those families who demonstrate a more pronounced short-term reaction to daily stress. In addition, one vulnerability factor (child aggressiveness) and one protective factor (social support from a spouse) will be tested as moderators of the relation between stress and aversive parent-child interaction.